BILL ANALYSIS

S.B. 644

By: Huffman

Insurance

Committee Report (Unamended)

BACKGROUND AND PURPOSE

Insurance companies and pharmacy benefits managers often require prior authorization to dispense drugs that are expensive or that are not on an insurance plan drug formulary. Interested parties contend that, because the number of prior authorization forms has increased, the process of fulfilling prior authorization requirements is time-consuming and expensive and can cause delays in patient treatment.

S.B. 644 seeks to save time and streamline the prior authorization process by requiring the commissioner of insurance to develop a single, standard form for requesting the prior authorization of prescription drug benefits.

RULEMAKING AUTHORITY

It is the committee's opinion that rulemaking authority is expressly granted to the commissioner of insurance in SECTIONS 1 and 2 of this bill.

ANALYSIS

S.B. 644 amends the Insurance Code to require the commissioner of insurance by rule, not later than January 1, 2015, to prescribe a single, standard form for requesting prior authorization of prescription drug benefits; to require a health benefit plan issuer or the agent of the health benefit plan issuer that manages or administers prescription drug benefits to use the form for any prior authorization of prescription drug benefits required by the plan; to require the Texas Department of Insurance (TDI) and a health benefit plan issuer or that issuer's agent to make the form available electronically on the websites of TDI, the health benefit plan issuer, and the agent of the health benefit plan issuer; and to establish penalties for failure to accept the form and acknowledge receipt of the form as required by commissioner rule. The bill requires a health benefit plan issuer or the issuer's agent, not later than the second anniversary of the date national standards for electronic prior authorization of benefits are adopted, to exchange prior authorization requests electronically with a prescribing provider who has e-prescribing capability and who initiates a request electronically.

S.B. 644 requires the commissioner, in prescribing the single, standard prescription drug benefits prior authorization request form, to develop the form with input from the advisory committee on uniform prior authorization forms established by the bill and appointed by the commissioner and to take into consideration certain other forms and national standards, or draft standards, pertaining to electronic prior authorization of benefits.

S.B. 644 requires the commissioner to appoint a committee to advise the commissioner on the technical, operational, and practical aspects of developing the single, standard prior authorization form required for requesting prior authorization of prescription drug benefits. The bill requires the committee to determine a single standard form for requesting prior authorization of prescription drug benefits, the length of the form, the length of time allowed for acknowledgement of receipt of the form by a health benefit plan issuer or an agent of the health benefit plan issuer that manages or administers prescription drug benefits, the acceptable methods to acknowledge receipt, and the penalty imposed on the health benefit plan issuer or agent for failure to acknowledge receipt of the form. The bill requires the commissioner to consult with the advisory committee with respect to any rule relating to the content and implementation of the form, or the technical, operational, and practical aspects of developing the form, before adopting the rule and authorizes the commissioner to consult the committee as needed with respect to a subsequent amendment of an adopted rule. The bill requires the commissioner, not later than the second anniversary of the final approval of the standard prior authorization form, and every two years subsequently, to convene the committee to review the form and determine if changes are needed. The bill sets out the composition of the committee and specifies that a member of the committee serves without compensation. The bill establishes that Insurance Code provisions requiring at least one-half of the membership of a commissioner-appointed advisory body to represent the general public and Government Code provisions relating to state agency advisory committees do not apply to the advisory committee on uniform prior authorization forms.

S.B. 644 establishes that a health benefit plan issuer or issuer's agent that fails to use or accept the prescription drug benefits prior authorization request form or fails to acknowledge the receipt of a completed form submitted by a prescribing provider as required by commissioner rule is subject to the penalties established by the commissioner.

S.B. 644 establishes the applicability of its provisions to specified types of insurance providers, coverages, and plans and the inapplicability of those provisions to specified types of health benefit plans, coverages, and related insurance policies and establishes that its provisions apply only to a request for prior authorization of prescription drug benefits made on or after September 1, 2015.

EFFECTIVE DATE

September 1, 2013.